Are We 'Entrepreneurs' Or Unemployed?

LAST year was a fabulous one for entrepreneurs, at least according to the Kauffman Index of Entrepreneurial Activity released last month by the Ewing Marion Kauffman Foundation. “Rather than making history for its deep recession and record unemployment,” the foundation reported, “2009 might instead be remembered as the year business startups reached their highest level in 14 years — even exceeding the number of startups during the peak 1999-2000 technology boom.”

Another surprise is the age of these new entrepreneurs. According to the report, most of the growth in startups was propelled by 35- to 44-year-olds, followed by people 55 to 64. Forget Internet whiz kids in their 20’s. It’s the gray-heads who are taking the reins of the new startup economy. And if you thought minorities had been hit particularly hard by this awful recession, think again. According to the report, entrepreneurship increased more among African-Americans than among whites.

At first glance, all this seems a bit odd. Usually new businesses take off in good times when consumers are flush and banks are eager to lend. So why all this entrepreneurship last year?

In a word, unemployment. Booted off company payrolls, millions of Americans had no choice but to try selling themselves. Another term for “entrepreneur” is “self-employed.”

The True/Slant model has been that of “entrepreneurial” journalist. Sounds so sexy. You’re in charge! Buying a big shiny desk! Minions! Interns!

Not so much. I photocopied my tax return from 2009 today because I’m asking my local YMCA for financial assistance to use their gym and pool, as I did (and received) last year as well. I lost my last staff job in June 2006, from the Daily News, where I was a feature writer. My income last year was 25 per cent of my staff salary. Yeah, I feel really entrepreneurial.

I am grateful for my partner’s staff job and his health insurance that covers me.

I’m forming a company this month, $1,200, as I finalize my book manuscript; I’ve been told to buy libel insurance as well. Those pesky little details of self-employment can add up to serious coin; I had to write my accountant a check for $395 for filing my 2009 taxes before we could start the next round of expenditures. He will allow me to pay that $1,200 over a few months, and I appreciate his kindness. Right now, my income from T/S ends in 28 days and I have no work lined up.

I’ll find something. It’s what we do. You get good at bush-beating when it’s your only source of income. I’m one of millions of U6ers — the Bureau of Labor term for those who don’t even bother looking for a full-time job anymore.

But I’ve freelanced for years and have some good relationships, editors I’ve been writing for for years, sometimes decades. Millions of “entrepreneurs”, as Reich so eloquently points out, are toast. They didn’t choose that role and they don’t want it.

There is some bitter irony that while some workers get government-paid subsidy and retraining, most of us don’t. We have to re-tool on the fly, stitching our parachutes as we plummet.

“This is my investment in the future right now,” said Fabiana Lee, 26, an interior designer who lost her job in 2009. She has been selling at the Greenpoint market since its inception in October. After experimenting with cookies (too much competition), she has pared her offerings down to two: gorgeously browned empanadas and irresistibly twee “cake pops,” golf-ball-size rounds of cake perched on lollipop sticks. At the moment, they are her main source of income.

Young, college-educated, Internet-savvy, unemployed and hoping to find a place in the food world outside the traditional route, she is typical of the city’s dozens of new food entrepreneurs. As the next generation of cooks comes of age, it seems that many might bypass restaurant kitchens altogether. Instead, they see themselves driving trucks full of artisanal cheese around the country, founding organic breweries, bartering vegan pâtés for grass-fed local beef, or (most often) making it big in baking as the next Magnolia Bakery.

My single largest check this year is likely (I hope) to be a windfall, something I discovered through a lucky accident, and a helpful friend, over coffee at Christmas in Toronto with a former editor — a copyright lawsuit settlement in Canada. I hired (and paid) a researcher there to sniff out all my qualifying pieces, 132 in all. The maximum payout any one of us can get is $55,000. I doubt I’ll get anything like that, but it’s going to be a very welcome check.

We all, certainly the T/S crowd, know how difficult journalism has become as a primary source of income — I am struck, and saddened when I read emails or blog posts from young writers barely a few years into their careers who have already been canned, sometimes more than once; Michael Hastings, no graybeard, bemoans the sale of Newsweek, where he (precociously) has already worked.

What was once called, with chilling literalness, a hand-to-mouth existence has — ta-dah! — been reframed as ‘entrepreneurial.’ Sort of like calling a used car “pre-owned.” We were “pre-employed.”

Share this:

Like this:

Related

OK, Caitlin, here’s the Pollyanna from the generation of yo’ Mama. (Great piece, thanks!) I wrote a series once on Entrepreneurs, that being such a sexy, shiny new buzz word in the 60s. I surely never saw myself as one until so labeled by the good folks at T/S. Like a zillion other profound works of mine those articles have long vanished, at least partly because I was always so busy hustling the next assignment I rarely bothered to clip & save. Along the way I authored the worst book ever to sully a bookshelf — but no matter, I needed the money & I do have a copy of that one (a commissioned bio of a CEO) and NO ONE will ever see it; and at least one really good book (Dying Unafraid, it’s still around) from my heart. Here’s the flip side from the far side: though I eeked and panicked a LOT and have zero pension and teeny Social Security, entrepreneurial writing (plain old freelancing, to be blunt) at least always was and still is the secret doorway into all the fascinations of the world. Like what you dug into to write Blown Away. I can’t wait for the new memoir. Maybe some of my fine, unpublished books will come out of hiding to join it. Maybe some of us will even stick around on the pages of the new T/S; surely other pages will pay $$ somewhere, simultaneously offering a chance to learn stuff and share ideas. “Entrepreneurs?” Nahh. But freelancing is still fun and you’re pretty darned good at it. Hang in.

Thanks for the kind words. I’ve freelanced for most of my career — I’ve had staff jobs, and enjoyed some of them, and really enjoyed having lots of disposable income.

I love the variety of what I write, indeed, but not watching pay rates plummet to where they were 20 or 30 years ago, or print markets (that pay) closing while on-line (that doesn’t or pays pennies in comparison) mushrooms.

The sweetie and I were discussing this issue and he rightly pointed out that I do love my life, just not my income. One does affect the other!

You are so right, Caitlin. This entrepreneurial spirit comes from survival instincts, not through any real desire to own one’s own business. In my case, I was laid off 15 months ago, for the second time in less than 8 years. I was in that weird income range–senior enough to be making well into six figures, but not senior enough to actually be calling the shots. So when times get tight, it’s the older, more experienced, and yes, more expensive people who get let go to be replaced by younger, less expensive headcount. I’m turning 50 this year and this last layoff was when I decided I can no longer expect corporate jobs to determine my fate when the whims of management are so mercurial; I have to go it alone knowing that, win or lose, it’s my own doing. So I went back to school with the full intent of eventually operating my own small business, hopefully sooner rather than later.

Is it a gamble? Hell yes. But really no more so than being so much flotsam in the corporate currents. At least I’m in control.

One thing I have noticed — it’s hard to miss — is that almost every single story I’ve read (and I have a stack a foot high I’m using in my book) about laid-off $$$$ workers who just can’t seem to find new jobs — they’re all 50 or above.

If there were some way to harness them into a voting bloc, maybe employers would have a clue that widespread age discrimination is – oh yeah — illegal.

The great American dream of upward mobility has been shattered. But the next American “dream” of working for yourself is not one that millions of people want or have the intellectual or emotional skills for. You can’t be a freelance banker or autoworker; you and I and Fran are fortunate to have skills we can flog into the marketplace, and the confidence to do so.

It is very rare to read truthful writing about the emotional impact of long-term unemployment or serial job loss. You end up — pardon the language — just not giving a shit. You’re demoralized, depressed, angry and grieving your loss of work, identity and income.

I started to investigate a few totally new career options that looked like a good it, by asking questions on LinkedIn. I did learn a lot, but oy…The money for one of them — hotel concierge — was so low I couldn’t believe it. That, after working your way up working the night shift IF you could get a hotel to even hire you.

That eager-beaver “Let’s re-tool!” isn’t always the first thought in mind every morning.

I would argue that you’re missing out on hearing about the Lost Generation (http://abovethelaw.com/2010/03/statistics-about-the-lost-generation-/) and though it’s hard for people in their 50s to recover, a lot of people in their 50s have assets that won’t carry them into retirement, but will prevent them from starving in the short term. The possibility of entrepreneurship requires at least some assets to get going, and 20somethings with college debts are in a worse position than people with some marketable experience. (Not that either is a particularly enviable place to be.)

The real problem with systemic discrimination is that under the current rules, the onus is really on the employee, not the employer, to prove it. It’s too easy for employers to claim, especially in service businesses, that there just isn’t enough revenue to support the headcount. (Hard to believe, actually, when, in the case of my most recent company, the CEO took in a pay package worth over $10 million as scores–if not hundreds–were laid off in offices around the country.) And, as is often the case in these situations, companies bank on the fact that they have deeper pockets than you do and can wait you out if you have the temerity to sue. But again, one would be foolish to do so if (a) you ever want to work in that industry again and (b)you have less than solid proof, i.e. no “smoking gun” memo or video of someone actually saying the words “let’s fire her because she’s too old.”

ford, I take your point; 50-somethings also face the expenses of their kids either in college or grad school or having moved home because they are out of work; saving more money for retirement (tough to do on a severely reduced income!) and knowing that – if they do try to get a FT job, as many of them would much prefer to do – they’ll never get a shot because a 25 or 32 year old will work for less money (less experience) and cheap wins.

This is always the ultimate win for the wealthy and those who choose not to hire any of us — we now inter-generationally duke it out over the crumbs while trying to re-invent a new pie. What a mess.

Though, I’ll say that as an associate with less than 5 years of practice, my willingness to work for less than a displaced 5th year means little to employers who want someone fully trained and possibly with a portable book of business. I haven’t really attempted to move to any positions where more experience isn’t considered more valuable to hiring managers, and haven’t experienced the phenomenon you’re talking about. One of many flaws of being forced to discuss things anecdotally rather than with statistics.

I don’t mean to win the argument — I see your points clearly and see they have merit. I find the whole thing deeply dispiriting.

Sounds like (?) you’re a lawyer and God love you the work you are expected to put in…It is the most galling when you work like a dog in expectation of reward (sounds canine, doesn’t it?) and get…the door!

This really is depressing. I had no intention of retiring at 60, the NYTimes made that decision for me. And if I had been younger, or if I had children, I would have been in dire financial straits. It is a sad state of events when someone like me has to thank her lucky stars for being gray and childless…

It’s the system everyone thought was so terrific —- unbridled capitalism — until it wasn’t anymore. As someone I once interviewed said, “It’s hard to pull yourself up your bootstraps when you don’t have any.”

The social safety net is thin and weak. Few new jobs of any value (i.e. decent wages, with paid benefits) are being created. An elite lucky few with the right skills, maybe willing to move anywhere, anytime, will do well.

The fantasy that everyone is secretly dying to work for themselves is quickly shattered when you see what it costs to buy your own health insurance, get paid promptly and find and retain enough “anchor clients” you have some sort of steady income. It is a tremendous amount of hard work and some people just aren’t cut out for that sort of endless hustle. I’ve done it for years. It is not getting easier.

The all-sacred, much heralded economic system – Capitalism (with a Capital C) is turning out to be nothing more than a race to the bottom.

The whole concept of slashing costs in order to maximize profits (and therefore maximize shareholder returns) can not go on indefinitely. There are only so many countries we can outsource to, so many benefits we can cut, so many jobs that can be labeled “redundant”. At some point, the quality of the infrastructure supporting this will collapse.

You can’t ask people to work for next-to-nothing and then complain that they’re not consuming … and therefore helping the economy recover. Nor can you ask employees to take pay cut after pay cut while the CEO walks away with a multi-milllion dollar compensation package. The entire system is unsustainable – by design. Meant to enrich a very few at the expense of a great many.

A great example is Dell computer. They succeeded by undercutting the competition and sold a lot of PCs. But eventually, the other PC makers figured it out and used the same tricks to cut their costs. There comes a point where the price just can’t get any lower. And then, it’s all the same. Look at Dell’s stock price to see how well that strategy worked for them.

In my book on retail, I kept asking — and met with stupefaction that I *was* asking and thereby challenging the status quo WHY exactly people who work retail (low level) are paid crap for a really hard boring job — that is actually deemed ESSENTIAL to selling stuff.

Every time I was told, “That’s how it is.” I guess slavery got the same defenses once upon a time.

If every greedy-ass CEO took a pay cut and re-distributed it to the people who really need it…maybe they’d spend a few nickels again.

I laugh bitterly at this “keeping the shareholder happy” argument — most of US are shareholders, if only through mutual funds.

Hey Caitlin, thanks for the shout out, I think :) It was fun while it lasted!

It’s funny, I left a nice staff job at NWK almost two years ago. A couple of my friends thought I was bit nuts for doing so, but I guess I had seen the writing on the wall, so to speak. (Though I didn’t think NWK would have this much trouble this quickly.) Anyway, what appeared at the time to be a risky move–leaving the cushy confines of a name brand–turns out to have been as risky as if I’d stayed put.

My thoughts on the entreprenurial journalist: it’s got its advantages, but it certainly does seem to be a tad precarious at times. Sadly, I don’t think doing anything else is in my DNA, and I do love what I’m doing, so I’m kind of stuck.I’ve been lucky in that–thus far–I’ve managed to get steady gigs, but there is an amount of uncertainty that I’ve had to become more comfortable with. I also don’t have any real responsibilities, so working is basically my life.(Does all of this sound obnoxius?) I think it’s sustainable existence for now!

But I’ve turned a corner, at least for the time being: I’ve lately been having much more positive thoughts about the future of journalism. I still do have my concerns, but my hope is alive.

Anyway, it’s been great sharing the T/S space with you, and have enjoyed your blog this past year. Can’t wait to read your latest book.

Freelance writers who in their book prefaces and on their blogs complain about their precarious income and their agony of composition often make me cringe.

Caitlin Kelly’s posts are NOT cringe inducing, because they are thoughtful with a minimum of whining. But so many other freelance writers give our chosen field a bad reputation by whining regularly. Yes, freelance writers generally operate in a buyer’s market, so pay rates are low. Yes, lots of editors and publishers are incompetent and/or uncaring. Yes, health insurance and other types of insurance are close to unaffordable even when obtainable. Yes, we’re taxed too heavily by all levels of government and audited,perhaps disproportionately, by the IRS.

Still, many (probably most) of us freelance writers chose this life. Readers who are not writers generally don’t care about our hardships, instead envying us our creative freedom. I never forget those wonderful magic words, “creative freedom.”

I am trying to make two points that are germane to many more readers than just writers — a tiny percentage of my readers.

1) Many people, in other fields, simply can’t find a job. See today’s NYT piece about more people who have given up — a record number since the Depression — or are blowing $$ to retrain for jobs paying way LESS than their old ones — people in their 50s. This is progress?!

Would I prefer a little less creative freedom for 2-3x the income? Yes, frankly. But the odds of me, or thousands of equally or better qualified competitors finding a job aren’t great in this economy. Being freelance can be amusing, but it works very well for some and less well for others. Whining is tedious — but so are rates so low I made more $$$ freelancing in college, a perspective 30-year veterans have that newbies do not.

This is a problem only exacerbated (like many other industries) by an excess of supply driving down what we can charge for our (now commodified) skills.

I think there are people like me who would much prefer to write news or features but no publication will assume the cost of a staff salary.

2) I weary of the notion that having creative freedom de facto means we should all be grateful to eat ramen. Taxes are too high on the self-employed (who can’t collect unemployment [i.e. further saving govt $$$] on our earnings) and market-rate health insurance obscene — we have no effective lobby to fight for our financial interests the way the HMOs and corporate employers do for theirs.

Business is tough everywhere. My husband and i have run a small retail business together for 23 years (a picture framing and needlework shop). 4 years ago we were forced to split up, and I went out and found a job that provided us with health insurance and some income. As the income from our small business continued to decline, we laid off all our staff, sold our building and moved to a small space in a strip center, and stopped paying ourselves. Finally last week we closed for good. I am so sad. And the final insult was my husband’s note from the government today, saying that because he has reported no income for the last 6 months (there was no income) he is ineligible for unemployment! Shocking, really. Business closes because it fails, and my husband is ineligible for unemployment because he hasn’t been working?

reba, I am so sorry to hear this — but am glad you shared this story. I may email you privately (if I may?) to include your story in my book on retail — which I am just finishing this month.

The “American dream” is very solidly entrenched — be a lone ranger, make lots of $$, succeed, hire people, make more $$, never need or ask for government help. And yet, we may do everything to the utmost of our abilities (you employed people! paid taxes, knit together your community) — and are now screwed. Then, there’s no government help at all?

“Independence” is expensive because none of us controls the larger economy but are each badly buffeted by it.

I’ve decided we need to start a Facebook page for everyone who’s been out of work for 6 months + — there are millions and (?!) there is NO collective political will or power in that. There is no “us” — just millions of furious, scared, depressed individuals. Great myth, that.

I’m the broad behind Broadside, Caitlin Kelly, a career journalist. photo: Jose R. Lopez You’re one of 14,910 followers, from Thailand to Toronto, Berlin to Melbourne. A National Magazine Award winner, I’m a former reporter and feature writer at The Globe and Mail, Montreal Gazette and New York Daily ... Continue reading →